BSP sees deeper economic contraction

Published by rudy Date posted on October 6, 2020

by Lawrence Agcaoili (The Philippine Star), 6 Oct 2020

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is now expecting a deeper gross domestic product (GDP) contraction of seven to nine percent this year as the economy stalled due to containment measures to slow the spread of COVID-19.

In a virtual conference, BSP Governor Benjamin Diokno told members of the Financial Executives of the Philippines (FINEX) that the COVID-19 pandemic has hit the Philippines hard, with the GDP contracting by nine percent in the first half.

The Philippines slipped into recession with the GDP contracting by a record 16.5 percent in the second quarter as the entire Luzon was placed under enhanced community quarantine in mid-March.

The economy partially restarted as the National Capital Region (NCR) shifted to general community quarantine in June, but Metro Manila and nearby provinces reverted to modified enhanced community quarantine from Aug. 4 to 18 as COVID-19 cases more than doubled to 200,000 from 100,000.

“Our current situation is best explained by saying that we are at a turning point from the deep zone brought about by the COVID-19 crisis. The turning of the wheel, of course, is a gradual process as we are not out of the woods yet,” Diokno said.

Diokno’s latest GDP forecast is deeper than the revised GDP contraction of 4.4 to 6.6 percent set by economic managers through the Development Budget Coordination Committee (DBCC) for this year.

For 2021 and 2022, Diokno sees a strong rebound with a GDP growth of 6.5 to 7.5 percent.

Diokno said the recovery process is expected to continue as more industries re-open following the relaxation of the quarantine measures.

“Six months into the pandemic, we are learning how to live with the virus. That is, we are learning how to strike the delicate balance between saving lives and protecting livelihoods and businesses,” Diokno said.

According to the BSP chief, the sharp contraction in the first half is not in any way a reflection of the country’s fundamentals which remain strong.

Diokno said there are early signs of recovery in terms of the rebound in remittances from overseas Filipino workers foreign direct investment inflows, all-time high gross international reserves slower decline in exports and imports, among others.

He also said the value of production for the manufacturing sector improved from March to July, while the manufacturing purchasing managers’ index recovered to 50.2 in September after slumping to 27.5 in April.

Diokno said the BSP’s crisis response toolkit also includes a long list of time-bound regulatory relief measures meant to help banks withstand the crisis.

“We did all these so that they, in turn, can help vulnerable sectors cope with the crisis as well. As the economy recovers, we intend to further strengthen our existing surveillance systems to gain a sharper and more nuanced view of developments in the economy,” he said.

April 2025

World Day for Safety and Health at Work
“Safety and health at work every day!”

Invoke Article 33 of the ILO constitution
against the military junta in Myanmar to carry out the 2021 ILO Commission of Inquiry recommendations against serious violations of Forced Labour and Freedom of Association protocols.
Accept National Unity Government
(NUG) of Myanmar.
Reject Military!
#WearMask #WashHands #Distancing #TakePicturesVideos

Time to support & empower survivors. Time to spark a global conversation. Time for #GenerationEquality to #orangetheworld!

Monthly Observances:

March – Women’s Role in History Month
April – Month of Planet Earth

Weekly Observances:
Last Week of March: Protection and Gender Fair Treatment of the Girl Child Week
Last Week of April – World Immunization Week

Daily Observances:
Mar 25 – International Day of Remembrance of the Victims of Slavery and the Transallantic Slave Trade
Mar 27– Earth Hour
Apr 21 – Civil Service Day
Apr 22 – World Earth Day
Apr 28 – World Day for Safety and Health at Work

Trade Union Solidarity Campaigns

No to Trafficking

Jobs! Jobs! Jobs!

Categories